jsilver at mail.essential
10-13-1999, 12:46 PM
NCRC Alert
Senator Gramm Aims Dagger at Community Reinvestment Act (CRA): Mark-up of
Banking Bill on October 14 and Floor Votes by October 20.
Dear Friends of Community Reinvestment:
In the 1990's, a strengthened Community Reinvestment Act (CRA) has played a
vital role in increasing affordable home, small business, and community
development lending. Passed in 1977, CRA is an anti-discrimination law
requiring banks to serve the credit needs of all the communities -
including low- and moderate-income neighborhoods - in which they are
chartered and from which they take deposits. CRA is a market-based
solution that has encouraged banks, community organizations, and public
agencies to come together and find profitable business opportunities in
traditionally underserved communities.
Now, Senator Gramm (R-TX) seeks to cripple the Community Reinvestment Act
(CRA). He is using financial modernization legislation as his vehicle.
This legislation will dramatically increase the market power of the largest
financial companies by allowing banks, securities firms, and insurance
companies to own each other outright. CRA must be updated as the financial
industry becomes more powerful. Yet, the Senator would do the exact
opposite by effectively exempting 80 percent of the country's banks from
CRA, instituting frivolous reporting requirements for banks and community
groups, and repealing the pro-CRA provisions in the House bill (see NCRC
memo below for more details).
A House-Senate Conference Committee is currently reconciling the
differences in the House bill (H.R. 10) and the anti-CRA Senate bill S. 900
that was authored by Senator Gramm. The Senator has manipulated the
Conference Committee process to craft a Conference Committee bill that
contains provisions harmful to CRA.
ACTION NEEDED:
This Thursday (October 14), the House-Senate Conference Committee will
begin a mark-up and revision of the bill crafted by Senator Gramm. It is
vital to tell Conference Committee members that the anti-CRA provisions in
Senator Gramm's bill must be replaced by the pro-CRA provisions in H.R. 10.
A list of the House-Senate Conferees is reproduced below.
Although your Representative may not be on the Conference Committee, it is
important to contact him or her because Congress will have to vote again on
a post-conference bill. The Conference Committee anticipates sending a
bill to the House and Senate as early as Wednesday, October 20.
A NCRC memo to House-Senate Conferees is reproduced below that contains the
major talking points concerning CRA and financial modernization
legislation. The
Capitol Hill switchboard number is (202) 224-3121. Please contact the
National Community Reinvestment Coalition (NCRC) on (202) 628-8866 if you
have any questions, and let us know what your Representative and Senator
said about the CRA parts of the bill. Carbon copy us on any letters you
send.
The Clinton administration has reiterated its veto threat in response to
Senator Gramm's draft of the financial modernization bill. NCRC believes
the administration should also veto a final bill if any of pro-CRA
provisions in H.R. 10 are deleted. Contact the administration by phone
(202) 456-1414, by fax (202) 456-2461, and/or by sending an e-mail to
president@whitehouse.gov.
NCRC Memo to House-Senate Conferees
FROM: John Taylor, National Community Reinvestment Coalition
TO: House-Senate Conference Committee on Financial Modernization
RE: The Pro-CRA Provisions of H.R. 10 Must be Restored
Dear Conferee:
The National Community Reinvestment Coalition (NCRC), the nation's CRA
trade association of more than 700 community organizations and local public
agencies, rejects Senator Phil Gramm's so-called compromise on financial
modernization legislation. This mark is nothing more than a narrow
partisan attack on the Community Reinvestment Act that will hurt working
class and minority communities in inner cities and rural areas. NCRC urges
the House-Senate Conference Committee to vote down the bill unveiled
Tuesday during Senator Gramm's press conference, and instead pass H.R. 10
for consideration by the full Senate and House. If the pro-CRA provisions
of H.R. 10 are not reinstated and any of the anti-CRA provisions of the
Senator's bill remain in financial modernization legislation, NCRC believes
the President must veto the final bill.
The Community Reinvestment Act (CRA) has led to tremendous increases in
safe and sound lending for working class and minority communities.
Recently, Federal Reserve Board Chairman Edward Gramlich estimated that
$117 billion in CRA-related home, small business, and community development
loans were made on an annual basis. Just last year, borrowers in low- and
moderate-income census tracts received more than 1.2 million in home loans
and half a million small business loans.
Senator Gramm's mark (also referred to as the Chairman's mark) would
threaten the continued progress in community reinvestment by effectively
exempting more than 80 percent of the nation's banks from CRA, by
eliminating penalties for financial holding companies if they do not comply
with CRA, and by instituting a frivolous reporting requirement for CRA
agreements. The Senator's bill would do the following:
… Effectively Exempt More than 8,600 Banks and Thrifts from CRA
Senator Gramm's mark would reduce the frequency of CRA exams from every
two to every five years for both urban and rural small banks with assets
under $250 million. This would effectively exempt more than 8,600
depository institutions or 80 percent of all banks and thrifts from regular
and serious reviews by CRA examiners and community groups. Small banks
will become adept at gaming the CRA process. They will relax their CRA
lending in underserved communities for four years, and then hustle to make
loans the last year before a 'twice in a decade' CRA exam. Senator Gramm's
bill includes a possibility of CRA exams for small banks if they seek to
merge with another lender or open up a branch. However, these ad hoc exams
would be at the discretion of federal regulatory agencies. Finally, the
Senator's small bank provision attempts to fix something that is not
broken. The Federal banking agencies recently estimated that complying
with CRA data collection requirements entails 10 hours a year of work by
small banks. Small banks themselves have commented on the ease of their
CRA exams, which were already streamlined in 1995 (see attached article
from American Banker).
… Eliminate the Requirement that Financial Holding Companies Maintain
Compliance with CRA
The Senator's mark drops the requirement that financial holding companies
must maintain at least Satisfactory CRA ratings if they want to continue
providing insurance and securities products. Banks, securities firms, and
insurance companies are chomping at the bit to enter each other's business
on a large scale, as would be permitted under a financial modernization
bill.
In exchange for this enormous privilege and profit-making opportunity,
financial holding companies should be required to continue serving the
credit needs of all the communities in which they are chartered and from
which they take deposits. H.R. 10 contained effective penalties, including
the possibilities of divesting or ceasing the activities of the insurance
and security company subsidiaries, if a depository subsidiary subsequently
failed a CRA exam. Since financial holding companies will become much more
powerful (due to consolidation unleashed by a financial modernization bill)
tougher penalties are needed to ensure continued compliance with CRA and
progress in community reinvestment. The penalties for failing to maintain
satisfactory CRA ratings must be reinstated by the Conference Committee.
… The Sunshine Provision Stifles Progress in Community Reinvestment
The Senator's bill requires the annual disclosure of CRA agreements and
contracts made pursuant to CRA to the Federal banking agencies. CRA
agreements and pledges are promises made by banks to provide a specified
amount of loans and investments to minority and working class communities
in future time periods.
The Senator's bill would require banks and any community groups that are
parties to CRA agreements to annually report these agreements to Federal
agencies. Federal agencies, however, would be explicitly prohibited from
overseeing and monitoring CRA agreements to determine if banks are
fulfilling their promises regarding future loans and investments. In its
recent approval order of the Fleet-BankBoston merger, the Federal Reserve
Board stated that Fleet's compliance with its $14.6 billion pledge will be
monitored in future CRA exams. This type of follow-through by regulatory
agencies will be prohibited by the Senator's sunshine provision. Without
accountability to meet goals established in CRA agreements, banks can
announce grand sums of reinvestment and then fail to actually make the
loans and investments.
The sunshine provision also applies to any contract over $10,000 for
CRA-related work done by non-governmental entities on behalf of banks.
CRA consultants, data vendors, micro-enterprise funds, and a broad array of
other organizations will now have to report their contracts to the Federal
government. This enormous and frivolous data reporting requirement will
stifle the amount of CRA-related activities that banks pursue. Finally,
the sunshine provision is one-sided. CRA agreements will become void if
community groups fail to annually report to Federal agencies, but remain in
effect if banks forget to report.
… Elimination of Public Hearing Requirement for Large Mergers
H.R. 10 required federal banking agencies to conduct hearings in
geographical areas in which the agencies believed that mergers involving
banks with more than $1 billion in assets would have significant impacts.
Public hearings are a critical time for CRA enforcement since they provide
an opportunity for elected officials, religious leaders, community
organizations, and ordinary citizens to provide input about how mergers
involving major banks will affect their communities' access to loans,
branches, and other banking services. In addition, H.R. 10 instituted an
application requirement to federal agencies for mergers between banks and
non-depository institutions with assets of more than $40 billion. Senator
Gramm's bill deletes these critical public hearing and application
requirements.
In sum, Senator Gramm's mark will devastate efforts by banks, community
groups, and other parties to make capital and credit available to
underserved neighborhoods. NCRC insists that the Conference Committee
discard Senator Gramm's mark in favor of H.R. 10. NCRC's 700 member
community organizations and local public agencies speak with one voice
regarding the vital importance of CRA to America's working class and
minority communities.
Senate Conferees
All of the Senate Conferees will consider all portions of the bills,
including those that affect CRA.
Democrats:
Paul Sarbanes (D-MD)
Christopher Dood (D-CT)
John Kerry (D-MA)
Richard Bryan (D-NV)
Tim Johnson (D-SD)
Jack Reed (D-RI)
Charles Schumer (D-NY)
Evan Bayh (D-IN)
John Edwards (D-NC)
Republicans:
Phil Gramm (R-TX)
Richard Shelby (R-AL)
Connie Mack (R-FL)
Robert Bennett (R-UT)
Rod Grams (R-MN)
Wayne Allard (R-CO)
Mike Enzi (R-WY)
Chuck Hagel (R-NE)
Rick Santorum (R-PA)
Jim Bunning (R-KY)
Michael Crapo (R-ID)
House Conferees
House Conferees From Banking Committee
Since the House is sending many conferees, the House leadership split up
the duties of some of the conferees. The ten Republicans from the Banking
Committee will be considering all portions of the bills, including those
that affect CRA. The following Democrats will be considering the CRA
portions of the bill: LaFalce, Vento, Frank, Kanjorski, Waters, and
Maloney (NY).
James Leach (R-IA)
Bill McCollum (R-FL)
Marge Roukema (R-NJ)
Doug Bereuter (R-NE)
Richard Baker (R-LA)
Rick Lazio (R-NY)
Spencer Bachus (R-AL)
Michael Castle (R-DE)
Peter King (R-NY)
Edward Royce (R-CA)
John LaFalce (D-NY)
Bruce Vento (D-MN)
Barney Frank (D-MA)
Paul Kanjorski (D-PA)
Maxine Waters (D-CA)
Carolyn Maloney (D-NY)
Luis Gutierrez (D-IL)
Nydia Velazquez (D-NY)
Mel Watt (D-NC)
Gary Ackerman (D-NY)
Ken Bentsen (D-TX)
James Maloney (D-CT)
Darlene Hooley (D-OR)
House Conferees from Commerce Committee
All ten Republicans from the Commerce Committee will be considering all
portions of the bill, including those that affect CRA. The following
Democrats will be considering the portions of the bill that affect CRA:
Dingell, Towns, Markey, Waxman, DeGette, and Capps.
Tom Bliley (R-VA)
Michael Oxley (R-OH)
Billy Tauzin (R-LA)
Paul Gillmor (R-OH)
James Greenwood (R-PA)
Christopher Cox (R-CA)
Steve Largent (R-OK)
Brian Bilbray (R-CA)
Heather Wilson (R-NM)
Vito Fossella (R-NY)
John Dingell (D-MI)
Henry Waxman (D-CA)
Edolphus Towns (D-NY)
Edward Markey (D-MA)
Diana DeGette (D-CO)
Lois Capps (D-CA)
Bobby Rush (D-IL)
Judiciary Committee members Henry Hyde (R-IL), George Gekas (R-PA) and John
Conyers (D-MI) will consider anti-trust provisions of financial
modernization.
Agricultural Committee members Larry Combest (R-TX), Tom Ewing (R-IL) and
Charles Stenholm (D-TX) will consider privacy provisions dealing with the
farm credit system.
This post transferred from the cdb-l mailing list
Senator Gramm Aims Dagger at Community Reinvestment Act (CRA): Mark-up of
Banking Bill on October 14 and Floor Votes by October 20.
Dear Friends of Community Reinvestment:
In the 1990's, a strengthened Community Reinvestment Act (CRA) has played a
vital role in increasing affordable home, small business, and community
development lending. Passed in 1977, CRA is an anti-discrimination law
requiring banks to serve the credit needs of all the communities -
including low- and moderate-income neighborhoods - in which they are
chartered and from which they take deposits. CRA is a market-based
solution that has encouraged banks, community organizations, and public
agencies to come together and find profitable business opportunities in
traditionally underserved communities.
Now, Senator Gramm (R-TX) seeks to cripple the Community Reinvestment Act
(CRA). He is using financial modernization legislation as his vehicle.
This legislation will dramatically increase the market power of the largest
financial companies by allowing banks, securities firms, and insurance
companies to own each other outright. CRA must be updated as the financial
industry becomes more powerful. Yet, the Senator would do the exact
opposite by effectively exempting 80 percent of the country's banks from
CRA, instituting frivolous reporting requirements for banks and community
groups, and repealing the pro-CRA provisions in the House bill (see NCRC
memo below for more details).
A House-Senate Conference Committee is currently reconciling the
differences in the House bill (H.R. 10) and the anti-CRA Senate bill S. 900
that was authored by Senator Gramm. The Senator has manipulated the
Conference Committee process to craft a Conference Committee bill that
contains provisions harmful to CRA.
ACTION NEEDED:
This Thursday (October 14), the House-Senate Conference Committee will
begin a mark-up and revision of the bill crafted by Senator Gramm. It is
vital to tell Conference Committee members that the anti-CRA provisions in
Senator Gramm's bill must be replaced by the pro-CRA provisions in H.R. 10.
A list of the House-Senate Conferees is reproduced below.
Although your Representative may not be on the Conference Committee, it is
important to contact him or her because Congress will have to vote again on
a post-conference bill. The Conference Committee anticipates sending a
bill to the House and Senate as early as Wednesday, October 20.
A NCRC memo to House-Senate Conferees is reproduced below that contains the
major talking points concerning CRA and financial modernization
legislation. The
Capitol Hill switchboard number is (202) 224-3121. Please contact the
National Community Reinvestment Coalition (NCRC) on (202) 628-8866 if you
have any questions, and let us know what your Representative and Senator
said about the CRA parts of the bill. Carbon copy us on any letters you
send.
The Clinton administration has reiterated its veto threat in response to
Senator Gramm's draft of the financial modernization bill. NCRC believes
the administration should also veto a final bill if any of pro-CRA
provisions in H.R. 10 are deleted. Contact the administration by phone
(202) 456-1414, by fax (202) 456-2461, and/or by sending an e-mail to
president@whitehouse.gov.
NCRC Memo to House-Senate Conferees
FROM: John Taylor, National Community Reinvestment Coalition
TO: House-Senate Conference Committee on Financial Modernization
RE: The Pro-CRA Provisions of H.R. 10 Must be Restored
Dear Conferee:
The National Community Reinvestment Coalition (NCRC), the nation's CRA
trade association of more than 700 community organizations and local public
agencies, rejects Senator Phil Gramm's so-called compromise on financial
modernization legislation. This mark is nothing more than a narrow
partisan attack on the Community Reinvestment Act that will hurt working
class and minority communities in inner cities and rural areas. NCRC urges
the House-Senate Conference Committee to vote down the bill unveiled
Tuesday during Senator Gramm's press conference, and instead pass H.R. 10
for consideration by the full Senate and House. If the pro-CRA provisions
of H.R. 10 are not reinstated and any of the anti-CRA provisions of the
Senator's bill remain in financial modernization legislation, NCRC believes
the President must veto the final bill.
The Community Reinvestment Act (CRA) has led to tremendous increases in
safe and sound lending for working class and minority communities.
Recently, Federal Reserve Board Chairman Edward Gramlich estimated that
$117 billion in CRA-related home, small business, and community development
loans were made on an annual basis. Just last year, borrowers in low- and
moderate-income census tracts received more than 1.2 million in home loans
and half a million small business loans.
Senator Gramm's mark (also referred to as the Chairman's mark) would
threaten the continued progress in community reinvestment by effectively
exempting more than 80 percent of the nation's banks from CRA, by
eliminating penalties for financial holding companies if they do not comply
with CRA, and by instituting a frivolous reporting requirement for CRA
agreements. The Senator's bill would do the following:
… Effectively Exempt More than 8,600 Banks and Thrifts from CRA
Senator Gramm's mark would reduce the frequency of CRA exams from every
two to every five years for both urban and rural small banks with assets
under $250 million. This would effectively exempt more than 8,600
depository institutions or 80 percent of all banks and thrifts from regular
and serious reviews by CRA examiners and community groups. Small banks
will become adept at gaming the CRA process. They will relax their CRA
lending in underserved communities for four years, and then hustle to make
loans the last year before a 'twice in a decade' CRA exam. Senator Gramm's
bill includes a possibility of CRA exams for small banks if they seek to
merge with another lender or open up a branch. However, these ad hoc exams
would be at the discretion of federal regulatory agencies. Finally, the
Senator's small bank provision attempts to fix something that is not
broken. The Federal banking agencies recently estimated that complying
with CRA data collection requirements entails 10 hours a year of work by
small banks. Small banks themselves have commented on the ease of their
CRA exams, which were already streamlined in 1995 (see attached article
from American Banker).
… Eliminate the Requirement that Financial Holding Companies Maintain
Compliance with CRA
The Senator's mark drops the requirement that financial holding companies
must maintain at least Satisfactory CRA ratings if they want to continue
providing insurance and securities products. Banks, securities firms, and
insurance companies are chomping at the bit to enter each other's business
on a large scale, as would be permitted under a financial modernization
bill.
In exchange for this enormous privilege and profit-making opportunity,
financial holding companies should be required to continue serving the
credit needs of all the communities in which they are chartered and from
which they take deposits. H.R. 10 contained effective penalties, including
the possibilities of divesting or ceasing the activities of the insurance
and security company subsidiaries, if a depository subsidiary subsequently
failed a CRA exam. Since financial holding companies will become much more
powerful (due to consolidation unleashed by a financial modernization bill)
tougher penalties are needed to ensure continued compliance with CRA and
progress in community reinvestment. The penalties for failing to maintain
satisfactory CRA ratings must be reinstated by the Conference Committee.
… The Sunshine Provision Stifles Progress in Community Reinvestment
The Senator's bill requires the annual disclosure of CRA agreements and
contracts made pursuant to CRA to the Federal banking agencies. CRA
agreements and pledges are promises made by banks to provide a specified
amount of loans and investments to minority and working class communities
in future time periods.
The Senator's bill would require banks and any community groups that are
parties to CRA agreements to annually report these agreements to Federal
agencies. Federal agencies, however, would be explicitly prohibited from
overseeing and monitoring CRA agreements to determine if banks are
fulfilling their promises regarding future loans and investments. In its
recent approval order of the Fleet-BankBoston merger, the Federal Reserve
Board stated that Fleet's compliance with its $14.6 billion pledge will be
monitored in future CRA exams. This type of follow-through by regulatory
agencies will be prohibited by the Senator's sunshine provision. Without
accountability to meet goals established in CRA agreements, banks can
announce grand sums of reinvestment and then fail to actually make the
loans and investments.
The sunshine provision also applies to any contract over $10,000 for
CRA-related work done by non-governmental entities on behalf of banks.
CRA consultants, data vendors, micro-enterprise funds, and a broad array of
other organizations will now have to report their contracts to the Federal
government. This enormous and frivolous data reporting requirement will
stifle the amount of CRA-related activities that banks pursue. Finally,
the sunshine provision is one-sided. CRA agreements will become void if
community groups fail to annually report to Federal agencies, but remain in
effect if banks forget to report.
… Elimination of Public Hearing Requirement for Large Mergers
H.R. 10 required federal banking agencies to conduct hearings in
geographical areas in which the agencies believed that mergers involving
banks with more than $1 billion in assets would have significant impacts.
Public hearings are a critical time for CRA enforcement since they provide
an opportunity for elected officials, religious leaders, community
organizations, and ordinary citizens to provide input about how mergers
involving major banks will affect their communities' access to loans,
branches, and other banking services. In addition, H.R. 10 instituted an
application requirement to federal agencies for mergers between banks and
non-depository institutions with assets of more than $40 billion. Senator
Gramm's bill deletes these critical public hearing and application
requirements.
In sum, Senator Gramm's mark will devastate efforts by banks, community
groups, and other parties to make capital and credit available to
underserved neighborhoods. NCRC insists that the Conference Committee
discard Senator Gramm's mark in favor of H.R. 10. NCRC's 700 member
community organizations and local public agencies speak with one voice
regarding the vital importance of CRA to America's working class and
minority communities.
Senate Conferees
All of the Senate Conferees will consider all portions of the bills,
including those that affect CRA.
Democrats:
Paul Sarbanes (D-MD)
Christopher Dood (D-CT)
John Kerry (D-MA)
Richard Bryan (D-NV)
Tim Johnson (D-SD)
Jack Reed (D-RI)
Charles Schumer (D-NY)
Evan Bayh (D-IN)
John Edwards (D-NC)
Republicans:
Phil Gramm (R-TX)
Richard Shelby (R-AL)
Connie Mack (R-FL)
Robert Bennett (R-UT)
Rod Grams (R-MN)
Wayne Allard (R-CO)
Mike Enzi (R-WY)
Chuck Hagel (R-NE)
Rick Santorum (R-PA)
Jim Bunning (R-KY)
Michael Crapo (R-ID)
House Conferees
House Conferees From Banking Committee
Since the House is sending many conferees, the House leadership split up
the duties of some of the conferees. The ten Republicans from the Banking
Committee will be considering all portions of the bills, including those
that affect CRA. The following Democrats will be considering the CRA
portions of the bill: LaFalce, Vento, Frank, Kanjorski, Waters, and
Maloney (NY).
James Leach (R-IA)
Bill McCollum (R-FL)
Marge Roukema (R-NJ)
Doug Bereuter (R-NE)
Richard Baker (R-LA)
Rick Lazio (R-NY)
Spencer Bachus (R-AL)
Michael Castle (R-DE)
Peter King (R-NY)
Edward Royce (R-CA)
John LaFalce (D-NY)
Bruce Vento (D-MN)
Barney Frank (D-MA)
Paul Kanjorski (D-PA)
Maxine Waters (D-CA)
Carolyn Maloney (D-NY)
Luis Gutierrez (D-IL)
Nydia Velazquez (D-NY)
Mel Watt (D-NC)
Gary Ackerman (D-NY)
Ken Bentsen (D-TX)
James Maloney (D-CT)
Darlene Hooley (D-OR)
House Conferees from Commerce Committee
All ten Republicans from the Commerce Committee will be considering all
portions of the bill, including those that affect CRA. The following
Democrats will be considering the portions of the bill that affect CRA:
Dingell, Towns, Markey, Waxman, DeGette, and Capps.
Tom Bliley (R-VA)
Michael Oxley (R-OH)
Billy Tauzin (R-LA)
Paul Gillmor (R-OH)
James Greenwood (R-PA)
Christopher Cox (R-CA)
Steve Largent (R-OK)
Brian Bilbray (R-CA)
Heather Wilson (R-NM)
Vito Fossella (R-NY)
John Dingell (D-MI)
Henry Waxman (D-CA)
Edolphus Towns (D-NY)
Edward Markey (D-MA)
Diana DeGette (D-CO)
Lois Capps (D-CA)
Bobby Rush (D-IL)
Judiciary Committee members Henry Hyde (R-IL), George Gekas (R-PA) and John
Conyers (D-MI) will consider anti-trust provisions of financial
modernization.
Agricultural Committee members Larry Combest (R-TX), Tom Ewing (R-IL) and
Charles Stenholm (D-TX) will consider privacy provisions dealing with the
farm credit system.
This post transferred from the cdb-l mailing list